Tuesday, March 6, 2018

The significance of the 1948 recession

 - by New Deal democrat

The yield curve never inverted between the early 1930s and the mid 1950s. And yet there were four recessions during that time.

For that reason I am very leery of over-reliance on that metric as a necessary component of recession forecasting.

In particular, the biggest inflation that occurred ever since 1920 happened in 1947-48 -- an even bigger event than in the 1970s. The Fed pretty much sat on its hands. And yet there was a recession.

What would a case study of the 1948 recession show?  I take a look over at XE.com.